Mother Loses Her Son and Now Her Home

Maria Serrano had already suffered her greatest loss: In 1995, a metal rod burst out of a Los Angeles trash truck and punctured a school bus, killing her 8-year-old son, Brian.

Eventually, Serrano settled a lawsuit and used the money to buy houses for herself and her sister in Temple City.

Now, as a consequence of apparent deception by a relative and foreclosure by a bank, she has lost the two-house property and is about to be evicted.

Court records and other documents show that World Savings Bank repossessed Serrano’s property even though the bank had reason to suspect that title to her home was acquired through deception by her cousin Jesus Serrano. He faces trial in Los Angeles on related forgery charges.

At the time the Oakland-based bank was pursuing civil proceedings to repossess Serrano’s home, it was aware that her endorsement signature on a loan check was almost certainly forged by her cousin, according to a “suspicious activity” report by a bank fraud investigator.

The investigator was the first to bring data pointing to a possible forgery to the attention of the Los Angeles County district attorney’s real estate fraud office. After investigating, that office filed forgery and grand theft charges against Jesus Serrano.

But World Savings proceeded to repossess Maria Serrano’s home and place it on the auction block when the loan she did not know existed went unpaid. Serrano, a Mexican immigrant with little formal education, did not respond to a civil suit the bank filed against her.

Pretrial proceedings against Jesus Serrano, who has pleaded not guilty, are set to begin Sept. 7. Maria Serrano has been told by the new owner of her house to move out by Sept. 13.

Maria Serrano, 38, bought the property in 1998 after her family settled a lawsuit against the city of Los Angeles for $2.5 million. Serrano said her share was $1 million, about half of which she used to pay for the two homes.

Her attorney, Manuel Duran, said, “What [World Savings] did wasn’t technically illegal or wrong, but it sure does smack of immorality.”

World Savings Chief Executive Herbert Sandler and chief counsel Joseph Wynn said the bank’s attorneys who handled the foreclosure case initially had no reason to believe Maria Serrano was tricked. Wynn said the forgery allegation against Jesus Serrano has yet to be proved in court.

The district attorney’s office declined to make a statement on the foreclosure because it involves a pending criminal case. But during a July hearing on the case, Deputy Dist. Atty. Mary Ganahl harshly criticized the bank.

“World Savings’ actions in this case are inexcusable; unforgivable; downright immoral, if not illegal; and absolutely unethical,” Ganahl told Judge William Fahey during a request for documentation.

Prosecutors say that within a year of buying the property, Serrano was convinced by her cousin to sign a document he said was a “refund.” In fact, it was a document allowing her cousin to use her property as collateral for a $96,000 loan. Six months after the loan went unpaid, World Savings contacted Serrano to request payment, and she immediately told the bank she had no knowledge of the loan. Communication with Serrano was complicated by a language barrier and her near-total incompetence in financial matters, her lawyer said.

World Savings fraud investigator Bruce Knipp, formerly an investigator with the FBI, proceeded to look into the possibility of forgery. Knipp soon found evidence, later verified by district attorney staffers. The most powerful, according to court documents, was a sheet of paper, found after a search warrant was served at Jesus Serrano’s business, showing Maria Serrano’s signature being imitated in another person’s handwriting.

“It is apparent the signatures . . . are forged and that the person responsible is probably Jesus Serrano,” Knipp wrote in the World Savings suspicious-activity report dated Dec. 19, 1999.

World Savings went after Serrano’s property anyway, suing her in January 2000. Serrano failed to respond, saying her cousin threatened her. Because lack of response to a filed suit is seen as indirect admission in the court system, Los Angeles Superior Court judge David A. Workman issued a default ruling against Serrano in favor of World Savings. A later hearing, sought by Serrano’s attorney to set aside the default ruling, was unsuccessful, despite a written statement from a district attorney’s investigator that said her signatures were forged.

Serrano said her 4-year-old daughter is fearful of leaving their home after her uncle intimidated the family with threats.

Wynn, the World Savings counsel, said in an interview that his bank “had a bona fide lien” on the property. “The court made no finding on who forged the check,” he said. Serrano failed to respond to repeated notices from the bank, even when it threatened to sue, he said.

Sandler said he was “stunned” at criticism of his bank. “If we’re in the wrong, we always admit it,” he said. “If we did something wrong, if we did make a mistake, we want the right result to end up.”

The bank sold the foreclosed property to a new owner, who has been charging Serrano rent. Recently, the bank attempted to buy back the property from the owner. But the owner demanded more money than World Savings was willing to pay, letters between attorneys representing the bank and Serrano show.

Serrano says she has about $60,000 left from her settlement. World Savings says it owes her a share of the proceeds from the foreclosure. But she says she remains confused and saddened by the loss of what she considered her son’s legacy.

“I feel impotent. I let my son down,” she said. “I lost the only thing he left me because of my ignorance and because I trusted others.”